Types of Trusts and Charitable Remainder Trust - Essay Example

"While it is said that equity will not perfect an imperfect gift by imposing a trust where none is intended, yet there are instances where trusts are created without the parties being aware of its creation". There are many ways that trust can be arranged and be specific on how these assets can be passed to the beneficiaries. There are a number of benefits where trust is concerned. For instance, specific terms can be made hence controlling who or when distributions can be made (Ramjohn, 8). Agatha was a renowned business woman in London who was believed to be without parents and grew up in the streets. She had a fleet of public transit buses, 20 business stores, 5 clothing lines, and 30 restaurants among others. As fate would have it, she was diagnosed with cervical cancer final stages. Like any other person would do, she knew that she had to leave a responsible person to manage the assets. Her firstborn son was business oriented. Her youngest daughter was barely 16 years old. In her trust therefore, she let his son benefit from the business stores and the public transit buses only when he would marry and have at least one child. The rest of the property was a trust for her daughter Eva, after completing her master’s level of education so that she would be at a better position to manage. This information was taken with great amazement by her children as none of them had any idea in the first place how much their mother had left for them. She had not shown any signs that she was leaving anything behind for them as they knew that she owned nothing much. Meanwhile, the family lawyer was left in charge of all property. A trust that is properly structured can protect an asset the creditors of the beneficiary or beneficiaries who are not at a position to wisely manage their money. A trust can also be allowed to change from a public record and become private (Watt & Todd, 20). Robert was brought up from a very rich background. However, due to peer influence and the fact that his parents never denied him anything, he turned out to be an arrogant man and a drunk. Unfortunately, his parents were involved in a road accident and were pronounced dead at the arrival of the hospital. As the only child, he was placed on a trust for the family business, a top cream 5 star hotel, only when he would stop taking alcohol and own up. When Robert learnt about the trust, he was taken aback. He never would have thought that his parents would ever make him a beneficiary for anything due to his irresponsible behavior. It took him a few days and Robert sought ways of becoming sober. The board of the hotel was therefore placed in charge until then (Watt & Todd, 45). Types of trusts Marital Trust- this is whereby the beneficiary is the surviving spouse. Adam, a mechanical engineer working for Ford Motors Company, has been overly ill. At the time of his date, he made a trust for his wife as a beneficiary of all his businesses which was approximated to be about a $2,000,000. This was done by Adam without his wife’s knowledge with his reason being that she may not carry his wishes to terms. He made his wife the beneficiary so that she would be at a position to educate their two children, Paul and Eva. Adam knew his wife too well and there was no other kin he had in mind to carry such obligations rather than his wife. Adam had not given his wife reason to believe that he would place a trust on for her. At first, his wife thought it was a big joke the minute she learnt about the figure placed in her trust. That is the time that she realized how much her husband believed in her. Charitable lead trust- This kind of trust allows some benefits or assets to go to charity and what remains can go to the beneficiaries (Clements & Ademola, 121). Thomas is a person who has worked at a number of hospitals. The last years of his living, he worked for Penzance hospital. He has several houses in St Ives and Penzance. In his will, Thomas decided to place a trust for charity in the Cornwall County. The charity was to benefit from all his estates in Penzance which had most houses than St Ives. The houses that were in St Ives were trust for his daughters, Barbara and Amanda, for the houses in Penzance and in equally shares. He furthers illustrates that none of his beneficiaries should be of the protestant religion. This is the biggest surprise Thomas had given to his daughters. They had no idea that he owned any estate in St Ives because he has never mentioned it before. It was a shocker to them especially them being the beneficiaries of an asset they had no idea existed. Charitable remainder trust- this trust allows the beneficiary to receive an income stream for certain duration of time and what remains is stipulated to go to charity (Dyson et al., 11). Mark is a successful business oriented man. With the help of a friend, he managed to get a 10 year contract from a nearby power generation firm and supplied generators. The deal was that Mark would be paid on monthly basis for the services of those generators. Mark was living with his younger sister who helped him with home chores and other duties as he was not married. Due to his ailment, he put a trust for her that she would be the beneficiary of the income from the power generating firm for two years, until she was able to find something to do that is work or venture into business. When she is financially stable then the revenues from the firm would go to charity until the contract expires. Mark’s sister was aware of the said contract. But she had no idea that she would be the beneficiary of the trust especially for that period of time. It somehow excited her as she would be at a position to start a business that she has always wanted to establish. Works Cited Clements, Richard & Ademola, Abass. Complete Equity and Trusts: Text, Cases, and Materials. Oxford: Oxford University Press, Incorporated, 2008. Print. Dyson Heydon, John., Dyson, Heydon, John., & Mark James, Leeming. Cases and Materials on Equity and Trusts. London: LexisNexis Butterworths, 2011. Print. Ramjohn, Mohamed. Text, Cases and Materials on Equity and Trusts. London: Routledge- Cavendish, 2008. Print. Watt, Gary & Todd, Paul. Cases and Materials on Equity and Trusts. Oxford: Oxford University Press, Incorporated, 2003. Print. Watt, Gary & Todd, Paul. Todd and Watt's Cases and Materials on Equity and Trusts. Oxford, United Kingdom: Oxford University Press, 2007. Print. . Read More